The Syrian Central Bank’s plan to introduce a new currency, stripped of the portraits of Hafez and Bashar al-Assad, has sparked heated debate over the country’s economic priorities. While the move carries undeniable symbolic weight for the emerging state, economists are questioning its wisdom amid a crippling liquidity crisis and severely constrained public finances.
Symbolism versus Economic Reality
Central Bank Governor Dr Abdel Qader Hasria has championed the new currency as “a sign of our freedom” and a monetary emblem of the “Second Republic” shaped by the revolution. The practical objective is to simplify everyday transactions by removing two zeros from the lira’s value, easing the burden of carrying large bundles of cash for routine purchases.
Yet many economists argue that a far less costly alternative exists: printing higher denomination notes of the existing currency. Such a measure would deliver the same convenience without the enormous expense—estimated at $250–300 million—or the accounting disruption of a full currency redenomination.
The insistence on a costly overhaul appears driven more by politics than economics. The new banknotes are intended as a visual break with the past, removing the Assad portraits that dominate current 1,000 and 2,000-lira notes. This symbolic move, however, comes at a time when the government struggles to cover public sector salaries without external grants, raising questions about its fiscal priorities.
The More Pressing Issue: Frozen Banking System
Overshadowing the debate on currency reform is a deeper crisis: the severe restrictions on withdrawals from Syria’s banking system. Despite a Central Bank circular on 7 May promising withdrawal freedom for deposits made after that date, the vast majority of earlier deposits remain frozen or subject to stringent limits.
This includes not only personal and business savings but also vast sums trapped in the former import-financing platform once run by the Central Bank. Trillions of lira remain inaccessible, corroding public trust in the financial sector. Even Governor Hasria has conceded that the restrictions are “unacceptable” and has pledged to set a timeline for their removal—though none has yet been announced.
An Artificial Exchange Rate
Analysts agree the freeze is propping up the pound’s apparent stability. The exchange rate, currently holding around 11,000 lira to the dollar, is widely seen as artificial. Were withdrawals to be unfrozen, most experts estimate the currency would settle closer to 17,000–20,000 to the dollar.
This paradox undercuts the government’s narrative. While officials present exchange-rate stability as proof of progress, it is being maintained through the very financial controls associated with the old regime. Such conditions repel investment: no serious domestic or foreign investor will risk capital in a market where funds cannot be freely accessed.
Conclusion: Choosing the Right Priority
Syria faces a critical economic choice. Introducing a new currency may symbolise a political break with the past, but it is an expensive solution to a relatively minor logistical problem. The frozen banking system, by contrast, is an existential barrier to recovery.
The $250–300 million earmarked for new banknotes could instead serve as a lifeline to begin easing liquidity constraints and restoring confidence in the financial sector. Releasing frozen deposits would likely trigger a sharp devaluation, but it would also provide the first step towards a credible and transparent financial system. That, rather than redesigned currency, would offer a more realistic foundation on which to rebuild Syria’s shattered economy.
This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.
